"The 5 Worst Things About the Techno-Libertarians Solidifying Their Grasp on Our Economy and Culture"

From naked capitalism:

Lambert here: That Silicon Valley catchphrase “Move fast and break things” has always made my back teeth itch. So, what Eskow says here most definitely needs to be said. I see no reason whatever to give Silicon Valley squillionaires deference. We should stop doing that.

By RJ Eskow, a blogger and writer, a former Wall Street executive, a consultant, and a former musician. Originally published at Alternet.

Nowadays the Silicon Valley is either celebrated as a hotbed of creativity or condemned as a cauldron of greed and wealth inequality.

While there are certainly some talented and even idealistic people in the Valley, there’s also an excess of shallow libertarianism, from people who have enriched themselves with government-created technology who then decide they’re being held back by government. That’s shortsighted and vain. And yes, there are serious problems with sexism and age discrimination – problems which manifest themselves with some ugly behavior.

But such ethical problems aren’t solely, or even primarily, the product of individual character defects. They’re the result of self-reinforcing cultural norms at work. Anthropologists and sociologists could do worse than study the tech culture of the Silicon Valley. It would be important work, in fact, because this insular culture is having a deep and lasting impact on our economy and society.

Here, to star them off, are five socially destructive aspects of Silicon Valley culture:

1. Tech products become the byproducts of a money-making scheme rather than an end unto themselves.
It’s almost inevitable when big money enters the picture: Smart or talented people are drawn to a field for the chance to get rich, not necessarily because it’s where their greatest talents or dreams lie.  The same thing has happened to fields as diverse as film, pop music, and the financial sector.  There’s nothing wrong with getting rich, but it should be the byproduct of a happy marriage between talent and  inspiration.

But here’s how it works instead: The goal of entrepreneurs and innovators was once summed up in the cliched phrase, “build a better mousetrap.” But for  many Silicon Valley products and services, including services like Uber and AirBnB, the goal now is to build a product which can be hyped into a multi-billion-dollar valuation – preferably by winning as much market share as possible, and then using that market position to engage in the kinds of practices usually reserved for monopolies and monopsonies (markets in which there is only one buyer). This process is described in more detail here.

Instead of building a better mousetrap, the new Silicon Valley business model works like this:
i. Give your “mousetrap” away for free, or as close to free as you can make it. (Since you’re working with digital signals transmitted over a government-invented network, that can usually be done at minimal cost. In other cases it pays to benefit from a government tax loophole (see Amazon) or make an end run around the regulations your competitors must follow (see Uber, Lyft, and AirBnB).

ii. Use these government-conferred advantages, along with your own aggressive market moves, to gain a large or decisive marketshare.  (See Amazon, Facebook, etc.) In exceptional cases, actually build brilliant and superior software to win your market share. (See Google.)

iii. Use your newfound market share to a) bend government to your will wherever possible, b) screw down your suppliers’ prices, c) hit your customers with increased prices and/or new ads or other profit-making devices, and d) manipulate your customers without their knowledge. (See Uber, Amazon, Google, Facebook, et al.)

This business model has directed much of the Valley’s efforts away from inventing genuinely creative new products – and toward the kinds of aggressive tactics that, as we’ve written before, would be very familiar to the Robber Barons of the 19th century.

2. Even inspired leaders internalize a worldview which places profits over humane behavior.
Steve Jobs is a prime example of this phenomenon. As an early innovator in the tech field, Jobs – however interested he was in making money – was not drawn to the field for the sake of money alone. Nor was he following in the footsteps of others, seeking to replicate the successes of a Zuckerberg or a Sergey Brin, as newcomers to the field are now. Jobs possessed a genuinely inspired design vision, from the earliest days of his career to his last.

And yet, for all his gifts, the pursuit of wealth led Jobs to commit some morally reprehensible deeds. As “white collar criminologist” William K. Black Jr. told me in a 2012 radio interview, Jobs’ drive to maximize profits – and his craving to get new products to market as quickly as possible – almost certainly led him to knowingly ignore abuses and safety threats to the Chinese workers who built his products.  That, in turn, led to dormitory-based workers being forced to work under extreme conditions. These unheeded warnings also led to the horrific burning deaths of several workers.

Amazon’s Jeff Bezos is also unquestionably an innovator. But the working conditions which Amazon’s warehouse workers endure would seem familiar to their Apple counterparts in China. As documented by Simon Head in his book “Mindless: Why Smarter Machines Are Making Dumber Humans” (excerpt here), Amazon’s American warehouse workers are subjected to ever-harsher production expectations and invasive measurement techniques. Head documents the case of a Pennsylvania employee who worked 11-hour shifts and was ultimately fired for “unproductive periods” which lasted only minutes. GPS devices in an England warehouse tell workers which routes they must travel – inside the warehouse – and their expected travel time.

Amazon’s German operations employed “a security firm with alleged neo-Nazi connections that … intimidated temporary workers lodged in a company dormitory … with guards entering their rooms without permission at all times of the day and night.” An Allentown facility which lacked air conditioning repeatedly reached temperatures of more than 100 degrees one summer. More than fifteen workers collapsed, but supervisors refused to open garage doors. Reports Head: “Calls to the local ambulance service became so frequent that for five hot days in June and July, ambulances and paramedics were stationed all day at the depot.”

A number of Silicon Valley CEOs were also implicated in a widespread conspiracy to illegally suppress wages and prevent job-seeking from engineers and other key employees. Mark Ames, who has reported extensively on the conspiracy, wrote that “confidential internal Google and Apple memos … clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP.”

These incidents are by no means exceptions in the Silicon Valley culture. The most generous way to interpret behavior like this is to assume that Steve Jobs and operated in a culture whose worldview downplayed the human impact of business practices. That, in fact, is reinforced by other aspects of Silicon Valley’s leadership society.

3. The culture encourages a solipsistic detachment from reality, even as its brute economic strength colonizes everything it touches.
A dispassionate observer might be tempted to wonder how a culture filled with so many smart people can remain so unaware of, and/or disinterested in, their effect on other people’s lives?

For many of them, the evidence is literally right before their eyes: San Francisco’s richness and diversity is being drained away, as the city becomes unaffordable for more and more of its citizens.  They are all good with numbers, so the statistics on growing wealth inequality should not be hard for them to understand. And their arguments – e.g., that the “sharing economy” will benefit struggling Americans – are easily punctured by even a superficial look at US demographics. (Are struggling Milwaukee residents going to get rich driving tourists around their battered town, or renting out their inner-city apartments on AirBnB?)...MORE